Betting on the games: Canadian television’s annual spending on sports programming now exceeds $1 billion a year A DISCUSSION PAPER FROM 14 March 2019 © Shutterstock / PHOTOCREO / Michal Bednarek Table of contents Introduction .................................................................................................................................... 1 The telegraph and the newspaper ................................................................................................... 1 And then came radio … ................................................................................................................... 2 How CFL football helped shape the early history of the CTV Network ........................................ 3 From television … to the Internet … to smartphones … to … ........................................................ 4 Economic models ............................................................................................................................ 4 Game-changer: Rogers outbids CBC for “Hockey Night in Canada” ........................................... 6 Trends in spending on sports and news ......................................................................................... 6 The CBC and hockey: 2 minutes for lack of transparency ........................................................... 11 “Hockey Night in Canada” – comparing results for the iconic program ....................................... 12 Future considerations ...................................................................................................................... 13 Coming in the 2020s … the great recalibration of sports and media? ........................................... 13 List of figures 1. The historical sports/broadcast business model – dating back to the early days of radio ...... 5 2. The evolving sports/media business model may include many combinations of rights sales or retention, different combinations of revenue sources, and reception on multiple devices ..... 5 3. Canadian television, program spending on sports, 2007-2017 ................................................. 7 4. Spending on programs by conventional and specialty television services, Canada, 2007 and 2017, indicating spending by genre – news, sports, and all other genres .................... 8 5. Spending on sports programming by conventional and specialty television services, Canada, 2007 and 2017, indicating spending by public and private broadcasters ...................... 9 6. Spending on news by conventional and specialty television services, Canada, 2007 and 2017, indicating spending by public and private broadcasters .................................... 10 7. Comparison of estimated advertising revenues for “Hockey Night in Canada” – CBC (2010-2012), and Rogers on CBC (2015-2017) ....................................................................... 12 © 2019 Communications Management Inc. / E-mail: [email protected] i Introduction “For when the One Great Scorer comes to mark against your name, He writes – not that you won or lost – but how you played the Game." – Grantland Rice “How you played the Game.” A famous verse from one of the greatest sportswriters of the 20th Century. A metaphor for far more than just sports. And an indication of how, for many decades (or even longer), sports have been part of our shared experience. Some follow sports – either teams or individuals – for the love of the game. Some are most interested in the “home team”, or the team that was the “home team” in the place they were born. Some are devoted to teams from places they have never been, based on admiration for a star player or fascination with a unique team history. And some focus mainly on the marquee events – Stanley Cup playoffs, World Series, Grey Cup, Super Bowl, Olympics – drawn to viewing by the interest of family, friends, or colleagues. And, to a large extent, the history of the development of professional sports in particular, and that shared experience, are closely related to the development of the media. That is true in terms of the way that the media have extended the reach of sports, and it is also true that sports have played a significant role in a number of major policy developments for Canadian broadcasters and regulators. Yet, in 2019, many of the accepted wisdoms about the media are being challenged by technology and economics, and those challenges also extend to the relationship between the media and sports. The telegraph and the newspaper In 1987, sports historian Alan Metcalfe noted: Only during the last 100 years have conditions developed to allow for the emergence of truly national sport heroes. The telegraph and mass press in the second half of the nineteenth century were basic to the transmission of news across the continent and the world. All Canadians, for the first time, could become aware of the exploits of the great figures.1 The spread of the telegraph not only made it possible for local newspapers to provide news of sporting exploits from far and wide, but to do so almost instantaneously. In fact, the newspapers’ access to real-time telegraphic reports gave rise, in the 1880s, to what might be called a “telegraph+display” system for reporting on major sports events – as they were happening. Large mechanical (or later, mechanical/electrical) scoreboards were erected, on the walls of newspaper buildings in many cities, to present the play-by-play results of events like the World Series.2 1 Alan Metcalfe, Canada Learns To Play: The Emergence of Organized Sport, 1807-1914, McClelland and Stewart, 1987, pp. 173-174. 2 Mark Schubin, “Watching Remote Baseball Games Live Before Television”, Proceedings of the IEEE, October 2018, pp. 1854-1860. 1 Glenbow Archives Scoreboard set up by the Edmonton Journal, showing the final score in the first game of the 1926 World Series, played on October 2, 1926. The Yankees won Game 1, but lost the series 4 games to 3. Nine of the 18 players listed on the scoreboard are in the Baseball Hall of Fame – can you identify them? (Answers on page 13.) Crowds, often numbering in the thousands, would gather at the newspaper building to watch the large scoreboard get updated as each new play or development was received via the newspaper’s telegraph service. This “telegraph+display” system continued to be used well into the 1920s, as illustrated in the photograph from Edmonton reproduced above. And then came radio … By the 1920s, radio was beginning to emerge as a major medium, not only for reporting the results of games, but also as a means of broadcasting those games as they occurred. The first baseball game to be broadcast on radio was on KDKA, Pittsburgh, on August 5, 1921, between the Pittsburgh Pirates and the Philadelphia Phillies. (The Pirates won, 8-5.)3 3 See: https://www.philliedelphia.com/2016/08/august-5-1921-the-first-mlb-radio-broadcast.html. 2 The first hockey game to be broadcast on radio in Canada took place on February 8, 1923, in Toronto, but it only covered the third period of the game.4 The first complete hockey game to be broadcast on radio in Canada took place in Winnipeg on February 22, 1923.5 It was a game between the Winnipeg Falcons6 and the Port Arthur Bearcats, and was broadcast over CJCG, the radio station owned by the Manitoba Free Press.7 By the 1930s, sports on the radio had become ubiquitous, not only extending the ability to experience the games far beyond stadiums and arenas, but also changing the nature of sportswriting in newspapers, because many of the next day’s readers had also been listeners the day before. And, in Canada, after the Canadian Broadcasting Corporation (CBC) was created in 1936, “Hockey Night in Canada” became one of the most iconic programs on the CBC, first on radio, and then, starting in 1952, on television. The popularity of hockey, and the limited-channel environment in which it was broadcast, made it part of Canadians’ shared experience for many decades. How CFL football helped shape the early history of the CTV Network The Board of Broadcast Governors (BBG) was created in 1958, and replaced the CBC as the regulator of broadcasting in Canada. One of its first tasks was the licensing of new private television stations in major Canadian markets. By mid-1960, a number of new stations had been licensed, but it was not clear what “network” structure would be put in place among those stations. At the same time, there was an applicant for a separate network – Spencer Caldwell.8 And one of the key factors in the structural wrangling was Canadian football. One of the newly- licensed stations, CFTO-TV in Toronto, had outbid the CBC for the right to televise the CFL 4 Eric Zweig, “Star originated hockey play-by-play on air 90 years ago”, Toronto Star, February 8, 2013, p. S4. 5 “First Radio Broadcast Play-By-Play Of Game”, Manitoba Free Press, February 23, 1923, p. 10. 6 The Winnipeg Falcons were Canada’s representative in the 1920 Olympics hockey competition (the first time hockey was included), and won the first-ever Olympic hockey gold medal for Canada. 7 The name of the Manitoba Free Press was changed to Winnipeg Free Press in 1931. 8 Frank W. Peers, The Public Eye, University of Toronto Press, 1979, pp. 234-239. 3 games of the four Eastern Canadian teams. But Caldwell had an option for the microwave transmission required to show the games in multiple cities simultaneously. When the dust settled, CFTO-TV and Caldwell had come to an agreement, and, in 1961, the BBG granted Caldwell the licence for what became the CTV Network.9